Comment: Who is to pay for Crossrail?

Thursday 20 September 2007 11:11 BST

Today's meeting between the Transport Secretary, Ruth Kelly, and the Campaign for Crossrail lobby group is likely to be more interesting than most encounters between the project's supporters and government ministers. In an interview with this paper today, her first in her new job, Ruth Kelly has taken a new and robust approach to the question of funding for Crossrail. She makes clear that the share of the cost - at least £10 billion - which will be borne by private business has to exceed the extra 3p on business rates which private-sector leaders have already agreed to. She wants more. "There are going to be particular beneficiaries from the project and I think it's time to get that trade-off right and get cash contributions as well ... we are looking for very substantial contributions."

Just what does this mean? Is it now the case that BAA, Heathrow Airport and Canary Wharf - among the biggest beneficiaries of the project - will have to produce something in the order of billions of pounds to pay for it? This would be a remarkable development and a problematic one. The idea that the business rate can be raised to fund capital infrastructure projects - which was recommended by Sir Michael Lyons - is widely accepted as a means of paying part of the cost of Crossrail. That, however, spreads the cost of the private-sector contribution to such projects uniformly. Or else there could be a separate business tax, called the Crossrail levy. Singling out particular companies which will profit from a project for cash contributions is invidious. Of course, BAA will benefit enormously from Crossrail - but so will every business along the route. So will every passenger on the Central line, where congestion will be significantly relieved as a result of its construction. So will previously deprived communities in Whitechapel, Woolwich and Southall.

The Government was thought to be set to approve Crossrail in the Comprehensive Spending Review shortly but it seems to be guarding its position in case this does not happen, in which case it can simply blame individual big companies for their failure to pay enough cash. But the Government should be prepared to shoulder its own fair share of the cost. Proportionate to its population, London pays by far the greatest share of tax in the country and generates the greatest wealth. Decent transport infrastructure is the least we expect in return.